Mayes v. The Standard Insurance Co.

United States District Court, D. Kansas

September 24, 2014

JODY MAYES, Plaintiff,v.THE STANDARD INSURANCE CO., Defendant.

MEMORANDUM AND ORDER

JULIE A. ROBINSON, District Judge.

Plaintiff Jody Mayes was employed by CenturyLink as a NTAC II Support Engineer. She participated in a long-term disability ("LTD") plan, sponsored by CenturyLink and issued by Defendant The Standard Insurance Company ("Standard"). While out of work in August 2011 on short-term disability due to back pain, Plaintiff suffered a heart attack. She underwent heart surgery in September and again in December 2011. Plaintiff applied for and was denied long-term disability benefits in 2012. Plaintiff brings this action against Standard under the Employee Retirement Income Security Act of 1974 ("ERISA"), seeking judicial review of Standard's denial of long-term disability benefits. This matter is before the Court on the parties' cross-motions for summary judgment (Docs. 32, 35). As described more fully below, the Court denies Plaintiff's motion for summary judgment and grants Standard's motion for summary judgment.

I. Standards of Review

Summary judgment is appropriate if the moving party demonstrates "that there is no genuine dispute as to any material fact" and that it is "entitled to judgment as a matter of law."[1] Cross-motions for summary judgment "are to be treated separately; the denial of one does not require the grant of another, " but "[t]o the extent the cross-motions overlap... the court may address the legal arguments together."[2]

Both parties argue that they are entitled to judgment as a matter of law. ERISA gives Plaintiff, as plan beneficiary, the right to federal court review of the denial of her disability benefits.[3] "[I]n ERISA cases seeking review of a denial of ERISA benefits, the court's review is limited to the administrative record, ' i.e., the materials compiled by the ERISA plan's administrator in the course of making its decision."[4] This case is governed by the standards applicable to an appeal of an administrative decision, and "the court acts as an appellate court and evaluates the reasonableness of a plan administrator or fiduciary's decision based on the evidence contained in the administrative record."[5]

Plaintiff concedes that the LTD Plan provides discretionary authority to Standard to interpret its terms and conditions as well as to determine eligibility for benefits. Because the Plan gives the administrator discretionary authority, "we employ a deferential standard of review, asking only whether the denial of benefits was arbitrary and capricious."[6] Under this standard, "review is limited to determining whether the interpretation of the plan was reasonable and made in good faith."[7] The decision of the plan administrator will be upheld "so long as it is predicated on a reasoned basis, " and "there is no requirement that the basis relied upon be the only logical one or even the superlative one."[8] "Consequently, the Tenth Circuit has observed that the arbitrary and capricious standard is a difficult one for a claimant to overcome.'"[9] The Court looks for "substantial evidence" in the record to support the administrator's conclusion, meaning "more than a scintilla" of evidence "that a reasonable mind could accept as sufficient to support a conclusion."[10] "The substantiality of the evidence must be evaluated against the backdrop of the administrative record as a whole.'"[11]

In Metropolitan Life Insurance Co. v. Glenn, [12] the Supreme Court held that when an ERISA fiduciary is responsible for determining, in its discretion, eligibility for benefits under an employer-sponsored plan and is also the party responsible for paying claims, a conflict of interest exists.[13] The Supreme Court held that a reviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits; and the significance of the factor will depend upon the circumstances of the particular case.[14] The Supreme Court held that:

The conflict of interest... should prove more important (perhaps of great importance) where circumstances suggest a higher likelihood that it affected the benefits decision, including, but not limited to, cases where an insurance company administrator has a history of biased claims administration.... It should prove less important (perhaps to the vanishing point) where the administrator has taken active steps to reduce potential bias and to promote accuracy, for example, by walling off claims administrators from those interested in firm finances, or by imposing management checks that penalize inaccurate decisionmaking irrespective of whom the inaccuracy benefits.[15]

The parties agree that Standard acted as both the insurer and administrator of the Plan, but Plaintiff has not presented evidence that Standard has a history of bias or that the provision of benefits under the LTD-Plan had a significant economic impact on Standard.[16] Although the Court will weigh the dual-role conflict of interest "as a facto[r] in determining whether there is an abuse of discretion, "[17] the Court finds that the conflict should be given limited weight in this case.

II. Uncontroverted Facts

Plaintiff Jody Mayes was an employee of CenturyLink beginning in May of 2006, working as a NTAC II Support Engineer. CenturyLink sponsored an employee welfare benefit plan that provided long-term disability benefits to eligible, qualifying participants who complied with the terms and conditions of that plan ("LTD Plan"). Standard issued the Group Policy Number 643388-D that insured benefits that became payable under the LTD Plan. Mayes last day of work at CenturyLink was August 4, 2011. She was a participant in the LTD Plan.

The LTD Plan provides that a participant is "disabled" if he or she meets one of two definitions: (A) Own Occupation of Disability, or (B) Any Occupation of Disability. Under the "Own Occupation" definition, a participant is disabled if:

as a result of Physical Disease, Injury, Pregnancy or Mental Disorder:

1. You are unable to perform with reasonable continuity the Material Duties of your Own Occupation; and

2. You suffer a loss of at least 20% in your Indexed Predisability Earnings when working in your Own Occupation.[18]

The LTD Plan provides that Standard has "full and exclusive authority to control and manage the Group Policy, to administer claims, and to interpret the Group Policy and resolve all questions arising in the administration, interpretation, and application of the Group Policy."[19] The Plan provides that this authority includes the right to

(a) determine eligibility for insurance;

(b) entitlement to benefits;

(c) the amount of benefits payable; and

(d) the sufficiency and the amount of information we may reasonably require to determine a., b., or c., above.

Subject to the review procedures of the Group Policy, any decision we make in the exercise of our authority is conclusive. However, this provisions [sic] will not restrict any right you may have to file a lawsuit or contact the Louisiana Insurance Commissioner if your claim for benefits is denied.[20]

If a claim is denied, the LTD Plan provides that the claimant will receive a written notice of the denial that includes, inter alia, the reasons for the decision, and a description of any additional information needed to support the claim. If all or part of a claim is denied, the claimant may request a review and may send Standard "written comments or other items to support your claim."[21]

In January 2012, Mayes applied for LTD Plan benefits. Standard created an administrative record ("AR") regarding Mayes' claim that included all the documents submitted to Standard by Mayes and her physicians, attorney, and employer. The AR also includes documents Standard otherwise obtained while the claim was pending.

Medical Records Prior to March 2012

At various times between August 2011 and January 31, 2013, Mayes was examined and treated by neurologist Dr. Harold Hess, pain management physician Dr. Joel Ackerman, infectious disease physician Dr. Himal Bajracharya, vascular surgeon Dr. Prem Samuel, cardiologist Dr. Bernard Levi, cardiologist Dr. Gerald Mancuso, vascular surgeon Dr. Jeffrey Cameron, and primary care physician Dr. Lisa Schnick. Dr. Schnick is also a personal friend of Mayes. Medical records from these physicians are included in the AR. None of these physicians in the medical records state an explicit opinion that Mayes was physically or mentally unable to perform the material and substantial duties of her own occupation and did not impose any restrictions or limitations upon Mayes' activities after January 30, 2012.

Yet, Mayes' physicians made several notations in her medical records about her medical conditions during the period leading up to her LTD claim. The AR reflects that Mayes underwent lumbar spine surgery in 2008. Dr. Hess performed the bilateral L4-L5 hemilaminotomy and discectomy. He treated Mayes on August 11, 2011, noting that despite doing well after the surgery, she developed pain again in the right buttock radiating down the right leg to the right foot about one year prior, which had "markedly increased about three weeks ago."[22] Dr. Hess noted numbness and weakness in the right leg and after reviewing an MRI scan, referred Mayes for lumbar epidurals, and to a vascular surgeon for an evaluation because the MRI reportedly showed an abdominal aneurysm. Mayes was treated by Dr. Ackerman on August 24, 2011 and was administered a lumbar epidural. Dr. Ackerman noted that Mayes tolerated the procedure well and that she would continue with pain medication at the direction of her primary care physician. During the course of his examination, Dr. Ackerman noted that Mayes' pain was rated between 7/10 and 10/10, and that she was not sleeping well.

Mayes suffered a heart attack, her second, on September 2, 2011.[23] On September 6, she underwent a quadruple bypass surgery[24] performed by Dr. Samuel. Karen Johnson, D.O. completed a consultation report on September 7, indicating a consultation for diabetes management during Mayes' hospitalization. The report indicates that Mayes suffered from new onset diabetes and was prescribed medication for the condition.

On September 30, Mayes attended a follow-up visit with her primary care physician, Dr. Schnick. Dr. Schnick observed that Plaintiff was "feeling pretty good but having a little bit of memory issues and the first few nights at home was a little unstable. Much improved now. She also needs some FMLA papers signed. No other issues today." Dr. Schnick also recited Mayes' medical history, which included her aortic aneurysm, the herniated disc in a new area, and numbness in her right leg. The progress note explains that Mayes is not a good back surgery candidate yet because of her heart condition. Mayes also presented with symptoms associated with a tick bite.

Mayes returned to Dr. Ackerman on October 19, 2011 for an epidural steroid injection. Dr. Ackerman observed symptoms of foot drop, however, Mayes informed Dr. Ackerman that Dr. Hess had ruled out surgical intervention due to her heart condition.

On December 1, 2011, Mayes underwent an abdominal aortic aneurysm repair with aortic stent placement, performed by Dr. Jeffrey Cameron. Dr. Cameron noted that Mayes "tolerated the procedure well" and that she was "in stable and satisfactory condition" in recovery.[25]

Plaintiff had an appointment with Dr. Schnick on December 13, 2011, to follow-up on her diabetes, and to conduct lab work. Dr. Schnick noted Mayes' recent surgery and that Mayes was doing "a little bit better" after having abdominal pain. Mayes asked for a stronger dose of Cymbalta for her chronic back pain, and discussed her continued sleeping problems. Dr. Schnick noted that her recently-prescribed Ambien caused her to be up "running around, " and her husband was worried she could fall and injure herself. She also noted increased hot flashes since her heart surgery.

Dr. Schnick provided Standard with an Attending Physician's Statement on January 7, 2012, in conjunction with Mayes' LTD claim. Dr. Schnick relayed Mayes' heart condition and her degenerative bone disease, resulting in a ruptured disc in July 2011 that requires surgery in the "next few months." Dr. Schnick recommended that Mayes stop working, describing Mayes' limitations as "Pt. w/CABG & AAA repair physically weak & [reduced] mental capacity due to O2 deprivation, " for sixty to ninety days from the date of the report.[26] Dr. Schnick recommended continued cardiac rehab until Mayes could undergo back surgery.

Also in January 2012, Mayes was treated by Dr. Ackerman and Dr. Hess. Dr. Ackerman noted concern with Mayes' foot weakness and that Mayes told him that Dr. Hess did not want to entertain surgery for her back until March 2012, given her heart condition. Dr. Ackerman recommend follow-up in two months to restart possible lumbar epidural steroid injections. Dr. Hess presented Mayes with several alternative options to handle her right lumbar radiculopathy. Mayes was to try to see if sitting in a slouched or leaning forward position helps her pain, which would mean she was a candidate for nonsegmental instrumentation and fusion of L3-L4. The other options ...

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